A Random Walk Down Wall Street; Including a Life-Cycle Guide to Personal Investing
This gimmick-free, irreverent, and vastly informative guideâ��with over half a million copies soldâ��shows how to navigate the turbulence on Wall Street and beat the pros at their own game.Skilled at puncturing financial bubbles and other delusions of the Wall Street crowd, Burton Malkiel shows why a broad portfolio of stocks selected at random will match the performance...more
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For the statistically interested, the problem with a lo...more
It's hard to work in Silicon Valley without being affected by Wall Street. When I started working I was interested in technology, not business and finance. Business and finance seemed a bit beneath me. (Actually, technology seemed a bit beneath me too. I was kind of a snot...more
-The "Firm Foundation Theory" or fundamentals of stock picking are based on the following:
1.)the expected growth rate
2.)the expected dividend payout
3.)the degree of risk
4.)the level of market interest rates
BUT, the two caveats are 1)expectations about the future cannot be proven in the present (hence the title of this book) and, 2.) precise figures cannot be calculated from under...more
The book begins with a fairly boring recount of seve...more
Scanning some of the reviews I deduce that people like this book if they believe in index investing and don't if they don't. I feel Malkiel's argument is very convincing partly because he demystifies a lot of what financial professionals do. For example, I have always wondered, when they tell you "if you do this you c...more
The writing is simple enough to understand for most budding investors, yet at the same time it appealed to the inner nerd from my...more
Remember that scene from The Graduate? Well, don't invest in plastics. Invest in Index Funds. Simple.
"It is impossible to consistently out-perform the market as a whole. Most investors would be best served by just invested in a market index."
If you dispute that premise then he does a good job of demonstrating its truth, with plenty of good data and examples. If you are like me, and fully buy into that premise already, then the bulk of the book will be skimmed through, occasionally...more
Being a conservative investor myself, this book resonated with me. It was reinforcement. But the book recognizes that not everyone has that view and basically says, "if you're going to pick individual stocks, here are some ways to minimize your risk" or "put most of your money in index funds, and use 5% to gamble with."
The overwhelming theme, though, is to inves...more
My biggest issue is that his cause for the Efficient Market Theory is that the market adapts...more
The strategy: diversify among asset-classes. For stocks, use unmanaged, inexpensive market index funds. Buy-and-hold, the longer the better. Want more return? Risk more loss.
Technical analysis gets a voodoo reputation because it _is_ voodoo. It's scientism. It flows from misunderstandings of probability in human-intuition, and the human cogn...more
In the tenth edition of A Random Walk down Wall Street, Malkiel evaluates and emphatically stands by his original investment thesis, that it is extremely rare for an individual investor to consistently beat the stock-market averages. Investors are better off buying and holding an index fund than attempting to buy and sell individual securities or actively managed mutual funds. An index fund which buys and sells all the stocks in a broad stock-market average is l...more
If you are new to investing, this book is a great way to start learning. If you have been investing fo...more
"Random Walk" is worth reading for anyone about to buy shares or mutual funds for the first time. While current descriptions of the book emphasize investment advice, the 1973 thesis is really that buy-and-hold is the only logical strategy. Uncovering market "opportunities" is a fool's game. Technical analysts, aka chartists...more
The author is the most stalwart realist I've ever encountered i...more
Part One introduces two main approaches to asset valuation: the firm-foundation theory, and the castle-in-the-air theory. The firm-foundation theory states that the price of an asset is based on its intrinsic value, which in turn is based on the assets current condition and future prospects. The castle-in-the-air theory holds more that an asset is worth only what someone is willing to pay for it, which is based on the emotions and perceptions of the investing c...more
For ones who are interested in the subject, this is absolutely a fun and useful read at the same time. I never know finance can be taught so clearly, straightforward and still so engaging. I thought the book would lose its charm after a while (when the author starts talking some technical things), but it does not. Ok, after finishing it, I adm...more
I read this classic in its first edition 38 years ago just after completing a graduate degree in economics, and was captivated. The Efficient Market Hypothesis which it expounds was in its infancy. Index mutual funds had not yet been invented. There was much chatter about "crowd psychology" and the like, but Behavioralism as a distinct academic discipline applied to stock price movements had not yet evolved. And of course, no personal computers.
Now the tenth edition...more
It's definitely comprehensive and interesting but reads a lot like "Stocks for Dummies." Still, I learned a ton and Malkiel's writing style keeps things relatively fresh. I hate skipping chapters so I bit the bullet and read the whole thing, but to really get the full value out of this book and not waste any time you can easily pick and choose which chapters you think apply to you. It's worth buying f...more